Simulate the rational bubble using the Blanchard Watson model (2 2 18) Define e(t) PU(t) 0 5 where PU is standard uniform distribution (explain why the relation e(t) PU(t) cannot be used) Use p 0 75 and R 0 1 as the initial values for studying the model sensitivity to the input parameters

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Question: Simulate the rational bubble using the Blanchard-Watson model (2.2.18). Define e(t) PU(t) 0:5 where PU is standard uniform distribution (explain why the relation

Simulate the rational bubble using the Blanchard-Watson model (2.2.18). Define e(t) ¼ PU(t) 0:5 where PU is standard uniform distribution (explain why the relation e(t) ¼ PU(t)

cannot be used). Use p ¼ 0:75 and R ¼ 0:1 as the initial values for studying the model sensitivity to the input parameters.

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